Droughts could cost Tunisia $1bn annually

• Sixth year of low rainfall
• Dams report 20% loss
• Olive yields under threat

Water shortages in Tunisia could cost the North African country up to $1.3 billion annually by 2030, according to a report from the World Bank.

For the sixth year in a row, below-average rainfall impacted the country’s agricultural production. The sector’s value fell 9 percent in real terms in the first half of this year compared to a year ago.

By 2050, overall water resources per person per year could decrease by up to 66 percent, fuelled by the climate crisis.

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Under the current trends in water demand, the reductions in supply are projected to result in 28 percent of the demand being unmet by that time.

“The economic and social impacts of future water shortages are going to be very significant,” the report said.

The World Bank projects that yields for olives, which accounted for 40 percent of total agricultural exports in 2019, could drop by as much as 69 percent by 2050.

Overall, agricultural production is expected to drop by between 29 percent and 33 percent relative to projections under a scenario of no climatic stress. 

These losses would translate into a reduction in real GDP by between 4.1 and 4.6 percent, according to World Bank projections. 

“A large portion of these losses could materialise by 2030, when the economy is predicted to be between 2.0 and 2.7 smaller than it would otherwise be without the dry conditions induced by climate change,” the Bank said.

This works out at between TD2.7 billion and TD3.8 billion ($0.9 billion and $1.3 billion) per year, the report added.

In September Tunisia’s Agriculture Ministry extended its quota system for tap water, with a ban on its use for agriculture “until further notice”.

Tunisian dams reported a 20.3 percent drop in water stored on August 24, falling to 694 million cubic metres, according to the National Agricultural Observatory. This compared to an average of 871 million cubic metres over the last three years.

Tunisia’s economy is forecast to grow around 1.2 percent this year and 3 percent in 2024, although this is subject to “risks created by the evolution of the drought, the financing conditions and the pace of reforms”, the Bank report said.